Credit cards vs SIPs: How the math works against you

Priya earns ₹75,000 a month. She has two credit cards, uses them "smartly," and her monthly bill runs ₹25,000 to ₹30,000. Some months she pays in full. Other months she doesn't. Her savings rate is 8%. She started a ₹2,000 monthly SIP last year and hasn't increased it since.

Priya isn't real. She's a composite in an article from a certified financial planner who tracks how credit cards slowly drain wealth. The mechanics the article describes are worth walking through, because the gap between what feels like a reward and what actually compounds is where the money disappears.

Minimum due is the trap

Credit card statements highlight a "minimum amount due" – a small fraction of the balance. It looks like a lifeline. Carry a ₹50,000 balance at 42% annual interest while paying just the minimum, and the total cost nearly doubles the original amount. Banks display the minimum prominently. The interest rate that makes it so expensive stays in the fine print.

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